Scribd
Upload
273 views11 pages

Introduction To Microeconomics: Chris Angelo Hatulan

The document provides an introduction to microeconomics including definitions of key concepts such as incentives, utility theory, and production theory. It also discusses the history of microeconomics and how the distinction between microeconomics and macroeconomics developed. Finally, it provides some tips for understanding microeconomics such as how consumer and producer decisions drive markets and limitations of perfect competition.

Uploaded by

Kyla Yssabelle Dolor
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
273 views11 pages

Introduction To Microeconomics: Chris Angelo Hatulan

The document provides an introduction to microeconomics including definitions of key concepts such as incentives, utility theory, and production theory. It also discusses the history of microeconomics and how the distinction between microeconomics and macroeconomics developed. Finally, it provides some tips for understanding microeconomics such as how consumer and producer decisions drive markets and limitations of perfect competition.

Uploaded by

Kyla Yssabelle Dolor
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 11

Introduction to

Microeconomics
CHRIS ANGELO HATULAN
In this presentation you’ll learn about:
• What is Microeconomics
• Basic concepts of Microeconomics
• History of Microeconomics
• Uses of Microeconomic
Microeconomics
• Microeconomics is the branch of economics that
studies the decisions made by individuals,
households, and businesses. The term "firm" is used
in a broad sense to refer to any form of business.
Microeconomics is in contrast to macroeconomics,
which is concerned with the entire economy.
Basic Concepts of Microeconomics
• Incentives and Behaviors: People's reactions to situations in which they are
confronted, whether individually or in groups.

• Utility Theory: Consumers will choose to buy and consume a combination of items
that will maximize their enjoyment or "utility," within the constraints of their financial
resources.
• Production Theory: Production or the process of transforming inputs into outputs is the subject of this
research. In order to maximize earnings, producers search out the most cost-effective combination of inputs
and techniques of combining them.

• Price Theory: The theory of supply and demand, which determines prices in a competitive market, is the
result of the interaction of utility and production theory. It is concluded that in a completely competitive
market, the price requested by consumers is the same as the price offered by producers. As a result,
economic equilibrium is achieved.
History of Microeconomics
Economists are classified as either microeconomists or macroeconomists.
The distinction between microeconomics and macroeconomics was most
likely developed in 1933 by Ragnar Frisch, a Norwegian economist who
shared the first Nobel Memorial Prize in Economic Sciences in 1969. Frisch,
on the other hand, did not use the term "microeconomics," instead
distinguishing between "micro-dynamic" and "macro-dynamic" analyses in
the same manner that "microeconomics" and "macroeconomics" are used
today. Pieter de Wolff, who enlarged the phrase "micro-dynamics" into
"microeconomics" in 1941, is credited with being the first to use the term
"microeconomics" in a published work.
10 TIPS IN MICROECONOMICS
• All of microeconomics is based on the assumption that customers and producers make decisions about what
to make or buy.
• A market may have trouble pricing a good under a variety of circumstances. When the marginal cost of a
good is at or near zero, a competitive market results in no one being able to price over zero, forcing
everyone to look for alternative methods to generate money.
• In a completely competitive market, the only thing that matters is pricing, which is always forced down to
the marginal firm's marginal cost of production. However, in many market configurations, price competition
is difficult, and firms are motivated to focus on other aspects of their product.
• Markets, for example, in health care, have unique and distinguishing characteristics that differ from location
to place and product to product.
• The expression "you can't beat the market" is one that causes economists to lose their minds. For starters, a
market is sometimes not the most effective organizational design when transaction costs are high.
• Consumer behavior is modeled as a limited optimization by economists because, in the end, you're
attempting to do your best given that you can't have everything.
Uses of Microeconomices
• Microeconomics can be used in either a beneficial or negative
way. Positive microeconomics explains how the economy works
and what to expect when specific conditions change. Positive
microeconomics predicts that if a car maker raises its prices,
people would buy fewer automobiles than previously.
• Positive microeconomics' explanations, conclusions, and forecasts
can then be used to prescribe what people, firms, and
governments should do in order to achieve the most useful or
beneficial patterns of production, exchange, and consumption
among market players.
END

You might also like